Newly Proposed Bill Seeks to Repeal Minnesota’s Minimum Gas Markup

Inflation and rising gas prices are issues that have been on the minds of both the general public and state legislature, and government officials are currently looking for ways to lower gas prices. One proposed solution comes in the form of a bill, Senate File 1868, that would seek to repeal Minnesota’s minimum gas markup.

“Current Minnesota law requires gas retailers charge an eight-cent markup per gallon of gas, this is called a minimum markup,” explained Minnesota Sen. Jordan Rasmusson, District 9. “Selling below this eight-cent markup is against the law and could subject the gas owner to civil and criminal penalties.”

The markup was first implemented in an attempt to reduce “predatory pricing,” which put small businesses at the risk of bankruptcy.

“By establishing that baseline,” said Alan Merschman, owner of Kenny’s Tire and Auto Repair in Bemidji, “the big boxes and the big chains couldn’t come in and drive all the local, small businesses out of business.”

Those in favor of this bill argue the minimum is no longer necessary.

“Minimum markup laws on gas may have been enacted with the best intentions in mind, but they do not protect consumers and they do not protect the number of small gas stations in the state,” said Institute for Justice Senior Legislative Counsel Meagan Forbes.

Local gas station owners worry the repeal of the minimum markup will lead to more drastic price competition against larger companies, once again putting them at risk.

“In the end what you’re gonna see is the options for buying your fuel will diminish,” said Merschman. “It’s gonna drive them out of the marketplace.”

During the bill’s initial presentation, senators in the Senate Committee on Commerce and Consumer Protection heard a number of testimonies both for and against the bill, before the bill was laid over for further consideration in the Senate.

Currently no addendums have been made to the proposed bill, and it has yet to be brought before the Senate floor to seek approval.